The field of the disclosure relates generally to the payment card industry, and more specifically, to methods and systems relating to universal activation, deactivation, and funding of reloadable, stored value, prepaid cards and the associated access and card accounts, for example, via restricted authorization networks.
The current configuration of the payment card industry includes both open loop and closed loop networks. Specifically, open and closed loop networks have been built on local, regional, national and international scales. For example, banking systems communicate via open loop networks that typically utilize standardized architectures and protocols, such as International Organization for Standardization (ISO) standard 8583, to ensure interoperability worldwide from retailer, to bank card networks, to bank card processors.
Examples of open loop bank card networks include Visa®, MasterCard®, American Express®, and Discover®. Services offered by these companies include credit, debit, prepaid, and general purpose reloadable card services. Further examples of similar open loop networks include network associated with banking, for example, Cirrus®, Plus®, Starcard®, and Interlink® signature and pin-based debit card networks. The scope of the worldwide open loop, payment network includes over 20 million points of sale/points of payment, i.e., POS/POP, or merely POS.
Closed loop networks typically communicate via proprietary architectures and protocols directly between POS systems at retailers and switching platforms where databases associated with the various card accounts reside. Such closed loop network systems are developed using proprietary protocols and processing architectures. Therefore, gateway switches are needed to complete protocol mapping and translation between the various proprietary systems. Closed loop networks may operate from tens to a few hundred thousand points of payment or service. Examples of such closed loop networks include retail card programs such as Apple iTunes®, Starbucks®, Facebook®, and Target® gift cards.
Hybrid networks have been created that utilize a discrete subset of an international open loop bank card network to emulate the features of the proprietary closed loop network. These hybrids are often referred to as restricted authorization network(s) or RAN(s). A RAN typically is built around a common loyalty, geographic, or business theme that provides a natural and often obvious relationship for the network to operate. An example would be a gift card for a particular mall, and usable with at least a majority of the retailers associated with the particular mall.
Retail and service oriented companies have created proprietary, closed loop, processing platforms where transactional gateways and bridges to open loop networks are typically implemented and segmented separately from the internal POS systems. Transactional routing and custom logic supporting message translation is used within a gateway switch to link internal POS networks to the open loop networks. Both closed loop processing platforms and open loop processing platforms may include virtual Internet, mobile sites, and electronic wallets where a plurality of funded prepaid accounts reside within their domain of operation.
In certain applications, a physical format of prepaid cards typically is proprietary to the networks for which the card has been assigned. Some cards utilize only a barcode while others utilize a magnetic strip (or stripe). Still others may incorporate both or still further the well known 16-digit card number may be printed (or imprinted) on such cards. In summary, card structures vary between open and closed loop networks. One specific format is utilized for payment cards intended for use in the open loop networks which allows such cards to traverse the entire 20 million points of the worldwide open loop network. Alternatively, proprietary closed loop cards are limited to a single network and the finite number of locations available to the card issuer and processor.
In regard to card activation services for both the open loop and closed loop network, activation networks currently exist in the form of direct connections to retail POS/POP systems. Such connections may be, via Web based or direct connect client/server architectures, via mobile applications and gateways, as features of the merchant acquirer networks and services, as applications that reside within POS systems, and as features of the global, universal payment networks such as VISA®, MasterCard®, Discover®, and American Express®. The majority of stored value, prepaid card accounts are activated via closed loop, retail issuers. Other closed loop payment card activations are via gift card mall services offered by various entities and many others as well as via web-based applications. Industry examples of companies offering and managing activation and funding networks include inComm®, Blackhawk Network, Green Dot®, NetSpendSM, and PayPal®.
Growth in retail and service industry card programs in the United States has reached a plateau, with minimal year over year growth. The industry is researching opportunities to leverage marketing and service partner relationships to offer new stored value, products and services. One of the problems and issues with current stored value products and the processes used to activate, deactivate, load, and reload cards and virtual accounts is that activation and funding of a specific prepaid card is typically limited to the specific point of sale systems where proprietary closed loop, network software has been installed to support the activation process. In such systems integration of proprietary software requires significant testing and integration tasks that may also need to span various POS hardware manufacturers and software systems. The result is extensive time and labor needed to implement the proprietary activation solution.
Another of the problems and issues with current stored value, prepaid products and the associated processes is that open loop activation of such cards requires software changes to support the network specific transactions proprietary to the universal payment networks. This solution also entails added cost and effort for integration and testing prior to full scale implementation across a retail POS platform.
With both open and closed loop networks residing within the United States, the Federal Reserve Bank's Automated Clearing House (ACH) and wire transfer network is used to complete electronic transfers of funds from one bank account to another. An equivalent central banking system and network is prevalent in countries worldwide and is used to complete electronic settlement in support of payments for goods and services completed using stored value, prepaid cards.
Finally, physical card formats are manufactured with varying magnetic stripe and bar code data which are proprietary to the network, resulting in added cost and complexity for maintaining inventory for the various proprietary card networks. As such, retailers are hesitant to offer, sell and activate stored value cards that are not associated with the universal payment networks.